New York SEC defense attorneys with Norman Spencer Law Group represent individuals and companies facing SEC investigations in New York and anywhere else in the country.
SEC conducts informal evaluations and formal investigations of potential violations of federal securities laws. SEC may get the leads of these violations from all open sources such as the Internet, major media stories, public filings, as well as the referrals from other federal organizations.
In many cases, before the formal investigation is underway, SEC will launch the initial evaluation, during which the investigators may ask for the voluntary production of documents, information and witnesses. This can be done in writing, by telephone, or even in person. It can be extremely dangerous to simply provide SEC the information it seeks. Any corporate officer approached by Enforcement Staff should inform them that an attorney will contact them and immediately contact an experienced SEC defense attorney. It is very important for the officer not to discuss anything at al with SEC and leave all communications to lawyers.
The investigators may ask for general information as well as the company records relevant to the subject matter of the investigation. SEC investigator may want to speak with corporate employees who may have the information sought. The decision to be interviewed is very important as it may have serious legal consequences. It should therefore be discussed with an experienced SEC defense attorney.
All government agencies involved in investigations always prefer targeted individual to share information voluntarily without compulsion. In many situations, this is the case, and the entire investigation can actually be completed through this informal process. If it doesn’t go well, the SEC will convert the informal inquiry into a formal investigation, which allows it to issue subpoenas and compel testimony.
It is always more beneficial for a company to resolve any issues the SEC has at the early stage and avoid a full blown investigation, which can drag on for years and result in significant financial burden, unwanted publicity, potential loss of share stock value, and lawsuits by shareholders.
There is therefore always a good reason to cooperate with the SEC Enforcement Staff at this early stage, which may resolve many issues before they arise and also help mitigate any potential penalties the SEC may want to levy on the company later. While we advise clients in cases involving investigations with potentially criminal consequences to be extremely cautious about sharing any documents with the government, in SEC informal inquires, a refusal to provide non-privileged information voluntarily will result in the SEC Formal Order that will authorize the Enforcement Staff to issue subpoenas calling for the production of documents and for testimony. Therefore, if you are a target of a SEC inquiry, you should discuss your case with an attorney experienced in handling SEC investigations and white-collar criminal cases
Document Production
The Enforcement Staff may request document production from a company and such requests may be very burdensome. This is because the SEC investigators may not understand the way the company works, how the documents are created and maintained, and they adopt a “shotgun” approach, asking for numerous records to be turned over in unrealistic timeframes. We discuss the request with the SEC and try limit the scope of both the document request and negotiate a more reasonable timetable for production.
Testimony
If the company and the SEC fail to resolve all the issues at the inquiry stage, the SEC normally will want to question witnesses. This is often done under oath and the testimony will be on record. All witnesses have a right to be represented by counsel during such testimonies and no one should be testifying in a SEC investigation without speaking to a SEC defense attorney first. The SEC is authorized to subpoena testimony from any person within the United States.
In addition, the SEC can subpoena not only the testimony of employees of the company but also of auditors, accountants, and others who may have information about the subject matter of the investigation.
If you or your company have been under a SEC inquiry or believe that you may be in violation of federal securities law, contact our experienced SEC defense attorneys. We represent companies and individuals facing SEC injuries, investigations, and enforcements, as well as complex white-collar criminal cases.
